Elon Musk's Tesla Tweets Could Spark a Fight With the SEC

Elon Musk is, if nothing else, a warrior. He has battled short sellers. He was waged war against the auto industry and the National Transportation Safety Board. He has scrapped with the media and Los Angeles traffic and, because 2018, Azealia Banks. Now, Musk may be in yet another battle, with the US Securities and Exchange Commissions.

This all started a week ago, when the Tesla CEO tweeted, “Am considering taking Tesla private at $420. Funding secured.” But as Musk revealed in a Monday blog post, that funding may not, in fact, have been all that secured. And for the agency that regulates the securities industry, that may be a problem. One that could hurt Tesla where it counts: its checkbook.

The problem is that securities law requires that public companies make certain sorts of information public to all their shareholders at the same time. And that said information be true. Anything less could be construed by courts (and juries) as fraud or market manipulation. That makes Elon’s tweet problematic. Investigators have reportedly opened a probe into the tweet, and could choose—after collecting facts—to either sue the company in a district court or bring a sanction before an administrative law judge. Tesla declined to comment.

For the SEC, Elon’s tweets have two potentially concerning elements. One is the medium. Sure, anyone investing in Tesla should know Musk says all the juicy stuff on Twitter. And the Commission has allowed companies to disclose information on social media in the past, provided other shareholders are alerted in some other way. In the eight days since Musk tweeted about taking Tesla private, the automaker has not filed paperwork to disclose a material event or disclosure, the kind of big deal happening that all shareholders need to know about.

The second concerning element of Elon’s tweet is the message, especially the “funding secured” part. From the SEC’s perspective, that should be a factual statement: Musk definitely has the $70 billion or so lined up to take Tesla private.

But the CEO’s Monday blog post wasn’t so straightforward. He writes of a July 31 meeting with Saudi Arabia’s sovereign investment fund, which recently took a 5 percent stake in Tesla. He says that the fund’s managing director “expressed regret that I had not moved forward previously on a going private transaction with him,” and that the director “expressed his support for funding a going private transaction with Tesla at this time.” Then Musk hedges: “I understood from him that no other decision makers were needed and that they were eager to proceed.”

Securing take-private funding is not that easy, says John Coffee, Jr., the director of the Center on Corporate Governance at Columbia Law School. It is an intensive process that requires a lot of financial wrangling before anything’s a done deal. “There are enough concessions in the blog post about this being subject to financial and due diligence review and final approvals to determine that Musk didn’t have funding secure,” Coffee says. “He had at best, a hope for it.”

For the SEC—which, like many enforcement agencies, enjoys making headlines with shows of force—this might be an easy win against Tesla. Its investigators don’t even have to prove that Musk meant to lie or mislead investors. “The SEC can just say there was a materially false statement,” says Coffee. “It doesn’t have to prove an intent to defraud.”

If Tesla were smart, Coffee says, it would strike a deal with the feds, and quickly. In rule violations and breaches, federal regulators generally appreciate a touch of diplomacy, or contrition. An easy settlement might only cost the electric carmaker tens or hundreds of thousands—while a loss at court could cost it millions. (Back in 2003, the SEC fined one company $25,000 for a take-private transaction gone foul.)

Fighting the SEC, on the other hand, might get the electric carmaker in to deeper trouble, for more legal headaches lurk. By Tuesday, three Tesla shareholders had filed proposed class action lawsuits against Musk and Tesla, alleging the CEO tweeted to squeeze Tesla short sellers and goose its stock price. (If that was the plot, it worked for a spell—the stock spiked, then settled back to its previous price.) To win their cases (which may be combined), the plaintiffs will have to prove Musk meant to screw with the stock price. That means they’ll have to find a paper trail, or be able to string together enough compelling evidence to convince a jury or judge of what Musk was thinking when he tweeted. But if Tesla loses a case to the SEC, Coffee says, elements of that judgement could be used during a civil case. Bad begets bad.

Musk, and Tesla by extension, have always been scrappers, and unafraid of a fight. For years, the CEO has expressed intense frustration with short sellers, and with the requirements that come with being a public company. (Recall that he called analysts’ questions “bonehead” and “dry” during a May earnings call.) But when it comes to the SEC, some contrition might be wiser. Indeed, Musk seems to have temporarily gone the more conventional CEO route, announcing Monday night that he’s working with serious financial institutions like Goldman Sachs and Silver Lake, and serious law firms, like Wachtell, Lipton, Rosen & Katz, and Munger, Tolles & Olson, on the take private transactions. Now that federal investigators are involved, the well-paid lawyers are here, too.


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How to Master the Art of Giving a Great Virtual Presentation

For online presentations, the first step is to get everyone on video (sometimes you have to insist). No more audio-only calls where all your audience members are just secretly multi-tasking. You can’t make an engaging presentation with slides and their disembodied voice. Get your face on video so people can see you and ideally you can see your audience too. This allows you to really connect with your audience, and see how they are reacting to you.

Also for online presentations, consider your environment. Spotty wifi with an unprofessional background and a poorly-lit face kills your presentation. I literally interviewed a candidate who had pile of dirty laundry behind him – not the best first impression. Zoom works great on wifi right down to 3G, but if you’re giving a big presentation, your best bet is hardwiring in. Then, make sure you are in a quiet space with no distractions. Clean up your background – just use a plain wall, or a nice plant – or try Zoom’s virtual backgrounds (sorry, shameless plug). Consider your lighting. Get there a couple minutes early to make sure it’s not too much or too little lighting. And check that you are lit from the front, not from behind you (i.e. don’t sit with your back to a window). It is distracting when cameras are too high or low or are angled so we’re only seeing part of someone’s face. Check that you are looking straight at the camera and your video feed is framing the upper part of your torso and your head – you want it to look as if you were sitting across the table from your audience.

And for both online and in-person presentations, you have to engage your audience. Don’t droning on for a long time, doing too many text-rich slides, and not matching your abstract to your presentation (this is actually a big one – people want to know what they’re getting in to). Instead, stop regularly to tell a (quick!) story, ask a question, take a straw poll, tell a joke, give your audience a small task, and so forth. Just keep them awake and interested! Also, you need adjust your presentation to your audience’s response. I have multiple large screens in my office so I can see all the participants in my meeting or presentation all at once and read their body language and facial expressions. If I see attention waning or some disagreement, I will switch things up.

Finally, a quick technical recommendation for online presentations. If you’re using Zoom, when setting up your meeting, select the “Mute upon entry” option. This makes sure that your participants join with their sound off, so you don’t get background noise that can disrupt the flow of your presentation.

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Foxconn profit below forecast on soaring operating costs, shares fall

TAIPEI (Reuters) – Foxconn posted second-quarter net profit well below expectations as a rise in component costs and unsold inventory weighed on the performance of the Apple supplier and world’s top contract electronics maker, analysts said.

FILE PHOTO: A shovel and FoxConn logo are seen before the arrival of U.S. President Donald Trump as he participates in the Foxconn Technology Group groundbreaking ceremony for its LCD manufacturing campus, in Mount Pleasant, Wisconsin, U.S., June 28, 2018. REUTERS/Darren Hauck/File Photo

The company, formally known as Hon Hai Precision Industry Co Ltd, reported net profit of T$17.49 billion ($567.25 million) late on Monday, 20 percent short of analyst expectations and slightly below the year-earlier results. Foxconn shares fell more than 3 percent on Tuesday.

Analysts said the results reflected concerns about a loss of momentum in global smartphone sales. Last week, Foxconn unit FIH Mobile Ltd posted a wider first-half loss and acknowledged that it faced a high risk of saturation in the smartphone market.

Foxconn’s results showed that its gross margin narrowed in the second-quarter in part owing to the cost of carrying unsold inventory of the iPhone X. Overall global smartphone shipments fell 3 percent to 350 million units in the April-June quarter compared with a year earlier, market research firm Strategy Analytics says.

However, Vincent Chen, an analyst at Yuanta Research, predicted a brighter outlook projected by Apple would benefit Foxconn and boost its margins in the third quarter.

Apple has forecast above-consensus revenue for later in the year, when it typically launches new iPhone models. Reports suggest these models will use OLED screens, which can display colors more vividly.

“We expect Hon Hai to be the main assembler of OLED version new iPhones and we believe the OLED iPhone model will see better demand in 2H18F,” Chen said in a research note.

The company’s report also illustrates its moves to diversify by pushing into new areas such as display screens – it bought Sharp Corp earlier this year – autonomous car startups and investments in cancer research.

Still, Foxconn earns most of its profits from manufacturing smartphones for Apple and other brands and from Foxconn Industrial Internet, a unit that makes networking equipment and smartphone casings, among other things.

“Investment in factory automation and component price hikes capped gross margin,” said Fubon Research analyst Arthur Liao.

Foxconn’s operating costs jumped 18.8 percent in the quarter.

Liao noted that Foxconn absorbed some expenses related to the Sharp acquisition this quarter, as well as development costs from setting up a factory in the United States, and taking Foxconn Industrial public in June.

Additional reporting by Chyen Yee Lee in Singapore and Yimou Lee in Taipei; Editing by Sayantani Ghosh and Neil Fullick

Vietnam's Vinfast in deal with Siemens for technology to make electric buses

HANOI (Reuters) – VinFast Trading and Production LLC has signed two contracts with Siemens Vietnam, a unit of Siemens AG, for the supply of technology and components to manufacture electric buses in the Southeast Asian country.

The headquarters of Siemens AG is seen before the company’s annual news conference in Munich, Germany, November 9, 2017. REUTERS/Michael Dalder

VinFast, a unit of Vietnam’s biggest private conglomerate, Vingroup JSC, said on Monday the deals will enable it to launch the first electric bus by the end of 2019.

“Electric buses are an essential element of sustainable urban public transportation systems,” Siemens Vietnam President and CEO Pham Thai Lai said in the statement.

VinFast will also produce electric motorcycles, electric cars and gasoline cars from its $1.5-billion factory being built in Haiphong City, it said.

In June, General Motors Co agreed to transfer its Vietnamese operation to VinFast, which will also exclusively distribute GM’s Chevrolet cars in Vietnam.

Reporting by Khanh Vu; Editing by Himani Sarkar

Cyber Saturday—The War on InfoWars

Good evening, Cyber Saturday readers.

A number of tech companies excised the rantings and ravings of Alex Jones, a pundit known for promulgating deranged conspiracy theories, from their digital repositories this past week.

On his website, InfoWars, Jones has been known to push baseless, detestable claims; for example, that the Sandy Hook massacre was a hoax and the September 11th attacks were orchestrated by the government. Fed up with Jones’ antics, Apple, Facebook, Spotify, and YouTube—with the notable exception of Twitter—corked his megaphone.

Add this confrontation to the longstanding tug-of-war between free speech and censorship on the web. One of my favorite contributions to this dialogue was supplied last year by Matthew Prince, CEO and cofounder of Cloudflare, a startup offering services that improve website performance and security. By policy, Prince’s firm chooses to protect all comers, whether that’s the webpage of an ecommerce startup or a black market site. Cloudflare has long maintained that policing the Internet is a job for, well, the police—not for itself.

Until Prince broke his own rule. As the CEO described it in a blog post, one day he felt a customer crossed the line. The Daily Stormer, a neo-Nazi sympathizing site, said that Prince’s company was a secret supporter of its ideology. That went too far—and to prove the point, Prince gave the site the boot.

“Now, having made that decision, let me explain why it’s so dangerous,” Prince wrote. “Without a clear framework as a guide for content regulation, a small number of companies will largely determine what can and cannot be online.”

Subverting his own decision, Prince continued: “Law enforcement, legislators, and courts have the political legitimacy and predictability to make decisions on what content should be restricted. Companies should not.”

I don’t have an easy answer for these predicaments. But as I considered Facebook’s move, the words of the company’s parting security chief, Alex Stamos, rang in my ears. “We need to be willing to pick sides when there are clear moral or humanitarian issues,” he said in March, part of a letter addressed to Facebook that leaked publicly. “And we need to be open, honest and transparent about our challenges and what we are doing to fix them.”

Amen to that. What do you make of this debate, dear reader? I would like to hear from you. What is the right course of action for these companies? Is Twitter CEO Jack Dorsey in the right for keeping Jones afloat, or not?

Do write. I welcome your thoughts.

Have a great weekend.

Robert Hackett

@rhhackett

[email protected]

Welcome to the Cyber Saturday edition of Data Sheet, Fortune’s daily tech newsletter. Fortune reporter Robert Hackett here. You may reach Robert Hackett via Twitter, Cryptocat, Jabber (see OTR fingerprint on my about.me), PGP encrypted email (see public key on my Keybase.io), Wickr, Signal, or however you (securely) prefer. Feedback welcome.

A Starbucks Drive-Thru Customer Bought the Stranger Behind Her a Coffee. Then She Got an Astonishing Letter

Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek. 

We waft about our lives absorbed in our fascinating selves and assuming so much about others.

We don’t really have much time for others, do we? 

There’s so much to do and so much to post to Facebook.

Yet here’s the story of an Ohio student called Mackenzie Mauller. This week, she described a simple day when she pulled up at a Starbucks drive-thru.

Yesterday I bought coffee for the lady behind me at Starbucks.. later in the day I found this is my mailbox. Small acts can make a big difference folks, spread some kindness.

Paying it forward can mean paying it backward, you see.

The letter she received told a story she could have never expected. 

It began: 

Thank you for the coffee! I rarely go to Starbucks and treat myself, but the last couple of months have been a bit of a struggle. My father just passed away and he was also my babysitter. My family and my children have had a really hard time. This morning my babysitter called off sick and I had to take the day off work. I decided to buy my kids breakfast and get myself coffee with total guilt because I am going to become a stay-at-home mom for awhile. 

The words total guilt were underlined. 

The mom continued: 

Since I was not planning on going this route in my life, I was not emotionally and financially prepared to quit working. I cried when I found out you were so sweet to buy my coffee and thrilled to see you in a couple houses down from where I live. I felt it necessary to know that what you did for me was more than just a coffee. It was something that turned my whole day around, put tears in my eyes and a smile on my face and I feel so grateful.

More than just a coffee.

Because we have a lot of assumptive talent, we have no idea what others may be going through.

Faces reveal and mask in equal measure.

Sometimes, a gesture this simple can have a strong and lasting effect, and the mom felt it necessary that Mauller know the effect her gesture had had. 

I asked Mauller, who’s studying flight technology at Kent State University, what made her do what she did. 

“There wasn’t much thought behind it,” she told me. “I just felt like doing something nice.”

She also told me she’s offered to babysit for Mauller.

“She has a babysitter, but if she needs someone I told her I could,” she said.

Mauller’s tweet went, as they say in today’s world. viral. Principally, I suspect, because simple, generous humanity is in rather short supply in our currently fractious world.

Mauller told the mom — Nicole Clawson — about the story now having been enjoyed by hundreds of thousands of people.

This has been such a great learning opportunity for them, on how to treat others, no matter what. They are excited to pay it forward, and treat others with kindness and selflessness.

Oh, I know the business world isn’t built on the twin rocks of kindness and selflessness.

But perhaps if these elements were a little more prominent, more people would enjoy their jobs and even be more productive.

It’s a thought, isn’t it?

?Prometheus, Kubernetes and system monitoring, reaches maturity

Video: What is Kubernetes?

Prometheus, the open-source systems monitoring toolkit usually used with Kubernetes, has graduated from the Cloud Native Computing Foundation (CNCF). To move from incubation to graduation, projects must demonstrate thriving adoption, a documented, structured governance process, and a strong commitment to community sustainability and inclusivity. Prometheus has made the grade.

Also: What Kubernetes really is

First built at SoundCloud in 2012, Prometheus became a standalone open-source project and joined the CNCF in 2016 as the second hosted project, after Kubernetes. This systems and service monitoring system collects metrics from configured targets at given intervals, evaluates rule expressions, displays the results, and can trigger alerts if some condition is observed to be true. When used with Kubernetes Prometheus supports service discovery and monitoring of dynamically scheduled services. It’s licensed under theApache 2.

Prometheus boasts the following features.

  • A multi-dimensional data model with time series data identified by metric name and key/value pairs
  • A flexible query language to leverage this dimensionality
  • No reliance on distributed storage; single server nodes are autonomous
  • Time series collection happens via a pull model over HTTP
  • Pushing time series is supported via an intermediary gateway
  • Targets are discovered via service discovery or static configuration
  • Multiple modes of graphing and dashboarding support

This sounds complex, but as Frederic Branczyk, a Red Hat Principal Software Engineer, wrote in a blog posting, “Prometheus is easy to set up as a single, statically linked binary that can be downloaded and started with a single command. In tandem with this simplicity, it scales to hundreds of thousands of samples per second ingested on modern commodity hardware. Prometheus’ architecture is well suited for dynamic environments in which containers start and stop frequently, instead of requiring manual re-configuration. We specifically re-implemented the time-series database to accommodate high churn use cases with short lived time-series, while retaining and improving query latency and resource usage.”

In short, Prometheus is a powerful, open-source system for collecting server metrics. It then stores them in a searchable database. With a highly dimensional data model, you can run queries to slice and dice a collected series of data to generate ad-hoc graphs, tables, and alerts, You can also integrate Prometheus allows with third-party data exporters, such as for Docker, HAProxy, and StatsD.

Also: How to install the Prometheus monitoring system TechRepublic

Branczyk continued, “Nearly as important as the software itself is Prometheus’ low barrier to entry into monitoring, helping to define a new era of monitoring culture. Multiple books have been written by both users as well as maintainers of Prometheus highlighting this shift towards usability, and even the new Google SRE workbook uses Prometheus in its example queries and alerts.” Chris Aniszczyk, CNCF’s COO added, “Since its inception in 2012, Prometheus has grown to become one of the top open-source monitoring tools of choice for enterprises building modern cloud native applications.”

While it’s best known for its use with Kubernetes to monitor containers and microservices on clouds, that’s far from Prometheus only use. For example, Uber uses Prometheus with its newly open-sourced M3 large-scale data metrics program,

Since Prometheus became a CNCF incubation program, its developers have completely rewritten its storage back-end to support high churn and been made more stable. The Prometheus team has also started a documentation push to make it easier to adopt.

“Since becoming part of CNCF, Prometheus has become an incremental piece in modern infrastructure stacks and helped shape the way organizations monitor critical applications,” said Julius Volz, Co-founder of the Prometheus project. “We are incredibly proud to have Prometheus graduate, and we look forward to working with CNCF to sustain and grow our community.”

Related Stories:

Bugs in Mobile Credit Card Readers Could Expose Buyers

The tiny, portable credit card readers you use to pay at farmer’s markets, bake sales, and smoothie shops are convenient for consumers and merchants alike. But while more and more transactions are passing through them, devices from four of the leading companies in the space—Square, SumUp, iZettle, and PayPal—turn out to have a variety of concerning security flaws.

Leigh-Anne Galloway and Tim Yunusov from the security firm Positive Technologies looked at seven mobile point of sale devices in all. What they found wasn’t pretty: bugs that allowed them to manipulate commands using Bluetooth or mobile apps, modify payment amounts in magstripe swipe transactions, and even gain full remote control of a point of sale device.

“The very simple question that we had was how much security can be embedded in a device that costs less than $50?” Galloway says. “With that in mind we started off quite small by looking at two vendors and two card readers, but it quickly grew to become a much bigger project.”

All four manufacturers are addressing the issue, and not all models were vulnerable to all of the bugs. The researchers are presenting their findings Thursday at the Black Hat security conference.

The researchers found that they could exploit bugs in Bluetooth and mobile app connectivity to the devices to intercept transactions or modify commands. The flaws could allow an attacker to disable chip-based transactions, forcing customers to use a less secure magstrip swipe, and making it easier to steal data and clone customer cards.

Alternatively, a rogue merchant could make the mPOS device appear to decline a transaction to get a user to repeat it multiple times, or to change the total of a magstripe transaction up to the $50,000 limit. By intercepting the traffic and clandestinely modifying the value of the payment, an attacker could get a customer to approve a normal-looking transaction that is really worth much more. In these types of frauds, customers rely on their banks and credit card issuers to insure their losses, but magstripe is a deprecated protocol, and businesses who continue to use it now hold the liability.

The researchers also reported issues with firmware validation and downgrading that could allow an attacker to install old or tainted firmware versions, further exposing the devices.

The researchers found that in the Miura M010 Reader, which Square and Paypal formerly sold as a third-party device, they could exploit connectivity flaws to gain full remote code execution and file system access in the reader. Galloway notes that a third-party attacker might particularly want to use this control to change the mode of a PIN pad from encrypted to plaintext, known as “command mode,” to observe and collect customer PIN numbers.

The researchers evaluated accounts and devices used in the US and European regions, since they’re configured differently in each place. And while all of the terminals the researchers tested contained at least some vulnerabilities, the worst of it was limited to just a few of them.

“The Miura M010 Reader is a third-party credit card chip reader that we initially offered as a stopgap and today is used by only a few hundred Square sellers. As soon as we became aware of a vulnerability affecting the Miura Reader, we accelerated existing plans to drop support for the M010 Reader,” a Square spokesperson told WIRED. “Today it is no longer possible to use the Miura Reader on the Square ecosystem.”

“SumUp can confirm that there has never been any fraud attempted through its terminals using the magnetic stripe-based method outlined in this report,” said a SumUp spokesperson. “All the same, as soon as the researchers contacted us, our team successfully removed any possibility of such an attempt at fraud in the future.”

“We recognize the important role that researchers and our user community play in helping to keep PayPal secure,” a spokesperson said in a statement. “PayPal’s systems were not impacted and our teams have remediated the issues.”

iZettle did not return a request from WIRED for comment, but the researchers say that the company is remediating its bugs as well.

Galloway and Yunusov were happy with the proactive response from vendors. They hope, though, that their findings will raise awareness about the broader issue of making security a development priority for low cost embedded devices.

“The kind of issues we see with this market base you can see applying more broadly to IoT,” Galloway says. “With something like a card reader you would have an expectation of a certain level of security as a consumer or a business owner. But many of these companies haven’t been around for that long and the products themselves aren’t very mature. Security isn’t necessarily going to be embedded into the development process.”


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5 best Chromebooks for school in 2018

I started my “portable” computer life with a 22-pound KayPro II in 1982. Since then, I’ve used IBM and Lenovo ThinkPads, Compaq luggables, Nec Ultralites, Dell XPS 13s, the list goes on and on. These days, my laptop of choice is the Google Pixelbook.

At a starting price of $999, this is not a Chromebook for everyone. But, if you want to make the most not just from Chrome OS, but from Android and Linux as well, it’s your Chromebook.

There are often discounts for the Pixelbook. You can also get a 10-percent discount on the Pixelbook if you’re a student.

At a minimum the Pixelbook comes with a 1.2GHz 7th gen Intel Core 7Y57 processor, 256GB of SSD storage, and 8GB of RAM. Unlike the others, the Pixelbook comes not with a 100GB free Google Drive storage for two years, but 1TB of free storage for two years. That’s a value of almost $240 alone.

The Pixelbook also has Google Assistant, built-in. You can get to it via its own dedicated button on the Pixelbook’s keyboard or by simply saying “OK Google.” It’s context sensitive, so it will open with search results for what you already have on screen.

This luxury-model Chromebook comes with a pair of USB-C ports. One of these, however, is used to power the system up. For Wi-Fi, it uses 802.11ac.

With a battery life of about 10 hours, it won’t last long as some of the others, but then you can do a lot more with it. On my high-end model, I’ve had over 100 tabs open, while running Android and Linux applications.

You sure wouldn’t want to give this Pixelbook to an elementary student, but an advanced high-school or college student would be another matter. The Pixelbook is meant for power users and developers, if that describes your daughter or son, then get them this one. You’ll be glad you did.

Back-to-school tech: More resources

Musk plan to privatize Tesla pushes $2.3 billion of debt above conversion price

NEW YORK (Reuters) – Elon Musk’s suggestion on Tuesday that he would like to take Tesla Inc private may provide something the electric car maker needs: a little debt relief.

FILE PHOTO: Tesla Motors Inc Chief Executive Elon Musk pauses during a news conference in Tokyo September 8, 2014. REUTERS/Toru Hanai/File Photo

The 11 percent jump in Tesla’s stock price following Musk’s public musings on possibly buying the company from existing shareholders drove $2.3 billion of convertible debt past the level at which investors can swap them for stock at a profit.

Tesla shares ended the day at $379.57, within reach of their all-time high and more than 5 percent above the bonds’ conversion price of $359.8676.

“This is great news for any bondholder any way you spin it,” said Ross Gerber, chief executive of Gerber Kawasaki Wealth and Investment Management who owns both the convertibles and the stock.

“Most of these bonds are convertible notes, so we can choose to convert into stock at a huge profit,” he said. “This is a boon for any bondholder at Tesla, because most of the bonds are convertible notes.”

Convertibles give bondholders the right to trade their debt for equity after shares rise over a certain set price.

The $2.3 billion in debt that investors can now take in equity rather than cash removes pressure from the cash-strapped company which has about $9.5 billion in long-term debt, according to its latest financial statements.

After first issuing a tweet that he was mulling the idea of taking Tesla private, Musk on Tuesday said in a letter to employees that he would prefer to run Tesla as a private company to allow it to operate away from the attention it receives due to its notoriously volatile stock price.

While no final decision has been made, he suggested a buyout price of $420 per share.

Investors like billionaire George Soros now have the option to take advantage of Tesla’s recovering share price, as the company’s $920 million convertible bond due in March 2019 passed its $359.8676 conversion rate.

Soros Fund Management LLC took a $35 million stake in the 2019 Tesla convertible bonds in May of 2018.

The company’s $1.38 billion convertible bond due in March 2021 also passed the same conversion rate.

The convertibles have oscillated between being in and out of the money several times over the last year.

They first rose above the conversion price in June 2017 and Tesla’s stock price hit a record high of $389.61 in September last year. The stock then plunged to as low as $244.59 in April as the company struggled to meet production targets for its Model 3 sedan and Moody’s Investors Service cut Tesla’s credit rating deep into junk-bond territory.

Tesla on Aug. 1 reported that it had ended the second quarter with $2.78 billion in cash after spending $610 million in capital expenses, while its negative free cash flow narrowed.

Tesla has been burning through cash as manufacturing problems have thwarted its ability to meet production targets for its Model 3 sedan.

The company also has a $1.8 billion high-yield bonds, which rose to 92 cents on the dollar on Tuesday, up half a cent and the highest since mid-June. Following the Moody’s downgrade, the bond had fallen to as low as 86.25 cents on the dollar. It now yields 6.75 percent versus more than 7.7 percent in early April.

Reporting by Kate Duguid; Editing by Dan Burns and Clive McKeef